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February 13, 2011

Bloomberg talks up US GAAP as merger talks continue

The Mayor of New York, Michael Bloomberg, said a merger between New York and German stock exchanges could force European listed companies to apply US GAAP in spite of growing US support to adopt IFRS.

Deutsche Börse AG is in advanced talks to buy NYSE Euronext, which is valued at $10 billion. The deal would create the world’s largest stock exchange by revenue and profits with Deutsche Börse shareholders owning about 60% of the shareholdings.

Bloomberg told Reuters that a union “will force a common set of accounting standards on the world; the American disclosures are better”.

It remains to be seen whether companies listed in a combined exchange would be required to report under IFRS, US GAAP or both, but as the US appears to be moving towards IFRS adoption it is more likely the international standards would be the accounting rules of choice.

The US Financial Accounting Standards Board is currently working on converging US GAAP with IFRS and the US Securities and Exchange Commission is expected to decide this year on whether US companies should switch to international standards.


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